11 February 2013

Zipcar: the limits of capital, scale, and marketing

Zipcar: Entrepreneurial Genius, Public-Company Failure - Corporate Intelligence - WSJ: " . . . there’s no denying it: We live in a Zipcar world right now – one in which we think little of “sharing” a car for a few hours, or renting a Parisian flat via Airbnb, or sharing sports gear, pets, or heavy construction equipment. All kinds of technology made this possible, but it was the inspiration of Zipcar’s founders in 2000 to stitch it into one, seamless experience. This is what Zipcar’s CEO Scott Griffith meant when he said in November that Zipcar was a “business model company.” The full liberation and efficiency of this “hyper-rental” economy has really just begun. And yet as Zipcar is showing, innovation does have its limits. Mainly the limits of capital, scale, and marketing. Zipcar was a prodigious money-loser. Funding growth around the world, it never once turned a profit, losing about $55 million since 2007. And the entry of behemoth Hertz made its task all the more costly. . . "

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